Sony Playstation Takes First to Market Advantage in Console Based VR

Virtual Reality Market Analysis and Commentary

13 October 2016 - Sony PlayStation Virtual Reality PSVR is the first console based virtual reality VR platform to come to market, meaning virtual reality is now present in all market sectors PC, mobile and now console. It debuts ahead of the Microsoft Project Scorpio VR offering (due for release in 2017), whilst Nintendo conspicuously maintains radio silence regarding the capabilities of its next generation console, dubbed the "NX". Consequently by enhancing the functionality, Sony has the opportunity to boost its lead further in the console market.

The launch of Sony PSVR will give the VR sector a major boost lowering the investment cost for VR head-mounted displays (HMD), making the higher end VR experience more accessible to a wider addressable market, not only driving awareness but also the experience of virtual reality.

The launch of PSVR is key for a number of reasons:The pricing point is critical, as the investment cost associated with buying into PSVR is much lower in comparison to the PC based VR platforms. The PSVR HMD is priced at US$399, compared to Oculus at US$599 and HTC Vive at US$799. So the cost is already significantly less than PC based HMDs.

The additional price point to consider is the PC or console platform that delivers content to the headset. If an investment is being considered for a high end gaming PC needed to deliver VR content to the HTC Vive or Oculus Rift HMD, this can add an additional US$900 to US$2500 to the total investment cost depending on the spec of the PC.

Sony has an advantage in terms of market share too, with in excess of 40 million PS4 units already in use worldwide, all of which are already VR capable. It certainly has a significant potential addressable market right from the launch date of its HMD. But even for new PlayStation adopters the total console and HMD investment cost, although significant, is less severe than for PC based VR with the PS4 console retailing at USD 279 a user can be up and running for less than the cost of the HTC Vive HMD.

In addition to the existing installed base of PS4 consoles, Sony has also launched the PS4 Slim and will launch the PS4 Pro in November. Both the Slim and Pro are VR capable and allow Sony to target users at different console price points with the PS4 Pro giving a higher end VR performance than the legacy PS4 installed base.

With its pricing, Sony is moving the investment threshold for a higher end VR experience closer to the mass market and establishing an affordable upgrade point for consumers seeking a more sophisticated VR experience than that offered by mobile VR, be it Samsung Gear VR or the soon to launch Google Daydream as well as the Cardboard platform.

The high profile of Sony PlayStation means that PSVR is also critical in terms of raising awareness of VR amongst the consumers and showcasing the potential for the concept.

Based on Futuresource recent consumer research 56% of consumers across the USA, France, Germany and the UK were aware of VR but only 6% had experience of using a virtual reality device. Consequently it is apparent that although consumer awareness of VR is increasing there is still much to do to heighten consumer perceptions of virtual reality and educate them into its potential and PSVR will be a catalyst in this process.

Notes:

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